A note from the editors: In recent weeks, Institutional Investor published a story based on poorly articulated conclusions from a questionable study regarding the performance of women hedge fund managers with children during the pandemic. Reaction from our audience was swift, and the editors acknowledge we erred in publishing the story without performing sufficient due diligence on the report and in not challenging it more vigorously during our internal processes. We regret that we did not hold ourselves to a high enough standard in this case, and furthermore apologize for any negative knock-on effects the story might have had.
To further correct our misstep, we agreed to have Nadine Terman and Cynthia Tusan expand on the reaction to the story, why it matters, and what we at Institutional Investor can do moving forward to not only prevent such a breach of acceptable standards, but also to help promote diversity, equity, and inclusion in our industry. Terman is CEO and CIO of Solstein Capital; Tusan is CEO and Chairman of Strategic Global Advisors.
Universal disbelief. That is the clearest way to describe the initial flood of outreach we received after a recent Institutional Investor story about women investors. After that first wave of reaction, though, the unintended effects of the story quickly became clear, and the message from our peers turned into an overwhelming call for action.
In that spirit, we reached out to the senior editorial team at Institutional Investor to open a channel of communication. In response, Institutional Investor took down the story in question, which was a great but easy first step. Moving forward, we are asking II to take the lead in questioning “studies” that conclude or even suggest that women and diverse managers cannot perform in this highly competitive field.
Such an approach regarding the story that sparked this conversation quickly would have revealed the shortcomings of the study it was based upon, including:
- Statistical insignificance, given a p-value > 0.05,
- An insufficient sample size, especially in comparison to the actual population of women investors,
- Questionable tactics (and thus conclusions) to determine whether an investor has children (and the age of any children and whether the mother is dedicating focus to them),
- Exclusion of manager data across geographies,
- And, sample bias, resulting in a study of spurious correlations.
At a certain point, we stopped accepting feedback from peers on the study, because the list was too long and too obvious – and a simple Internet search reveals broader, more well-known studies with opposing conclusions about women investors during the pandemic. Institutional Investor should, as a rule, question the hypothesis of any study, along with the logic, implications, and motivations behind it. Plus, even if a study clears that hurdle, it should still be presented in the context of any existing, reputable data covering the same or a similar topic.
Why does this matter to us? Because collectively we have worked incredibly hard to establish our existence in this industry – to find a job, fit in, move up the ladder, achieve results consistently, gain clients, support women and diverse peers, deal with discriminatory behavior, act as role models, convince others that results matter, and battle structural biases that keep women from running more than 2% of marketable assets globally, even when studies confirm that, overall, our returns are at least as good as that of our peers.
So, when an established, respected publication prints harmful conclusions based on questionable studies, it matters. Allocators read your article and think twice about funding a female manager. Managers read your article and think twice about hiring or promoting a female investor. Other media outlets think twice about highlighting women on their programs. Companies question their leave policies. The unintended impact is exponential.
We challenge Institutional Investor to help us #ChangeTheCourse and level the playing field for women — and more broadly defined — diverse managers globally. It’s the right path, and other influential platforms will follow suit.
